Professor
Daniel Spulber maps the constellation of international business,
creating order with a new framework

By
Aubrey Henretty

As
business leaders strive to work effectively with their counterparts
around the world, secret handshakes alone won't seal the deal.
According to Daniel
Spulber, the Kellogg School's Elinor Hobbs Distinguished
Professor of International Business, avoiding cultural missteps
is just the beginning of forging successful connections.

"Global
business is where strategy meets geography," says Spulber.
Managers today cannot simply duplicate domestic strategies
abroad, nor is it sufficient merely to possess a sense of
local history and custom in the native land of a business
partner. Leaders must organize a torrent of information about
economic factors in their companies' home countries and in
those of suppliers, customers and competitors.

"What
the manager needs to solve this problem is a conceptual framework,"
Spulber says.

"The
Star Analysis tells you how to gather and organize information
from the markets that you'll be working in," says Spulber,
an economist by training who joined Kellogg in 1990. "The
international business manager begins with an overview of
the marketplace."

If
that sounds easy, consider that the marketplace in any given
country is a vast web of commerce, culture, politics, technology,
labor and trade laws, costs and operating risks. And the global
marketplace is larger still and more complex.

Spulber's
Star Analysis starts with an overview of the marketplace in
the company's home country. Managers ask themselves how the
political and regulatory climates at home may strengthen or
weaken the company's global position and how well the brand
is known nationally. They consider the legal dynamics and
consumer behavior that may limit supply and cap demand at
home. Once managers have gathered this information, they move
on to the other four points of the Star Analysis, in which
they chart the commercial and cultural dynamics in potential
customer countries, supplier countries, partner countries
and competitor countries.

A
thorough analysis requires patience and persistence, but Spulber
says the effort will allow managers to "use global markets
as the way to meet the challenge of global markets."

To
illustrate the point, he describes an ideal response to the
complexity of global supply chains: that of Apple Inc. in
the production of the iPod.

"When
Apple made its iPod, the real innovation was not necessarily
the technology," he says. Apple entered the market late,
Spulber notes, but the company sought to set the gold standard
for portable MP3 players. "To do this in a way that was
affordable and cutting-edge, they had to go around the world
for components." He cites a recent University of California-Irvine
study that found the video iPod is composed of more than 400
separate components, sourced widely.

Spulber
points out that there was more to Apple's strategy than simply
scouring the market for bargains on parts and labor. "You
gain a competitive advantage by making the best connections,"
he says. He elaborates on the point in his book: "The
global business chooses the best match between its home country,
supplier countries, partner countries, and customer countries.
Toyota produces cars in the US, with relatively high labor
costs, to build customer relationships and respond quickly
to change in market demand."

Global
Competitive Strategy is a refined, condensed version of
the material Spulber has taught for the past six years in
International Business Strategy — a core course
in the Kellogg International
Business and Markets Program. Chapter topics ranging from
"The global mosaic" to "Global investment strategy"
give students a strong foundation in strategy basics, and
the final four chapters contain detailed profiles of leading
global companies.

"With
the Kellogg International Business and Markets Program and
the diverse backgrounds of our students, Kellogg graduates
are well positioned to be successful in the global marketplace,"
Spulber says.